Ethernet market hits ‘all-time high’ as Cisco dominates

Cisco’s domination of the ethernet switch and router markets continued during the final quarter of 2018, amid an “all-time high” for the technology segment.

According to findings from Synergy Research Group, vendor revenues passed the $12 billion (€10.6 billion) mark in the final quarter of 2018, achieving record figures in the process.

Cisco’s market share in switches and routers was 51% during the period, with the tech giant maintaining over half of the market share for the last twelve quarters.

Such domination, which is showing no signs of slowing down, extends to all three main markets, with the vendor reporting share of 57%, 60% and 37% in ethernet switches, enterprise routers and service provider routers respectively.

Behind Cisco, the ranking of vendors was different in each of the three markets but in aggregate Cisco is followed by Huawei, Nokia, Juniper Networks, Arista Networks and Hewlett Packard Enterprise.

According to data, other “active vendors” include Ericsson, Extreme Networks, H3C and ZTE.

“One other notable feature is Cisco’s ability to keep its market share at or above the 50% mark,” said John Dinsdale, chief analyst at Synergy Research Group.

“Huawei’s market share keeps on nudging upwards and Arista has posed a big threat in large, high-speed switches, but Cisco is not being shifted from its market leadership position.”

Such growth comes following a full year vendor revenue total in excess of $44 billion (€38.8 billion), up 4% from 2017.

For the full year the router markets were relatively flat compared to 2017 while spending on ethernet switches grew 8%.

“When you look at the overall Ethernet switch and router market the most notable feature is actually its stability,” Dinsdale added. “Despite a variety of challenges this large market keeps expanding slowly year after year. Moreover, we are not expecting this trend to change any time soon.”

Delving deeper, ethernet switching represents the largest of the three segments accounting for 59% of the total fourth quarter market, while also recording the highest growth rate.

“While demand for GbE switches continues to grow, the most notable feature of the market is the rapid deployment of 100 GbE and 25 GbE fixed switches,” Dinsdale explained.

Within the quarter, Dinsdale said revenues from both enterprise routers and service provider routers saw a “strong uptick”, helping to balance out declines seen in the first three quarters.

Full-year revenues for enterprise routers were marginally up on 2017 while revenues from service provider routers were marginally down.